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Employer of Record Guide · Canada

🇨🇦 EOR Guide —
Canada

Everything you need to know about using an Employer of Record in Canada — provider fees, compliance risks, hire speed, and EOR vs direct employment.

Low compliance riskMature EOR marketHire speed: Fast
← Canada Overview

Employer CPP rate

5.95% (2025)

Employer EI rate

~1.66% (1.4× employee rate)

Federal minimum wage

C$17.30/hr (2024)

Minimum vacation

2 weeks (rises to 3 after 5 yrs)

Statutory notice

1–8 weeks (province-dependent)

EOR providers active

Deel, Remote, Rippling, Oyster, Papaya

Our Recommendation

EOR ideal for multi-province hiring or international market entry

Canada is an accessible EOR market with relatively low employer taxes (~7.5%). The main complexity is provincial variation — employment standards, minimum wage, and workers compensation rules differ across 13 provinces and territories. EOR providers handle this well.

EOR provider fee range for Canada

9–15%on top of total employer cost

Rates vary by provider, headcount, and benefits scope. Always request itemised quotes from at least three providers.

EOR vs Direct Employment

EOR advantages in Canada

  • Hire across any province immediately
  • Provider handles CPP, EI, WSIB per province
  • No corporation required
  • Fast onboarding

EOR limitations in Canada

  • 9–15% markup
  • Provincial employment standards still vary
  • Provider controls contract template

Direct employment advantages

  • Full entity control
  • No markup at scale
  • Familiar common-law employment framework

Direct employment limitations

  • Provincial variation across 13 jurisdictions
  • Corporation setup required per province
  • CPP, EI, and WSIB all have separate rules

Local Entity Options

Setting up a legal entity in Canada.

If you outgrow EOR or prefer direct employment, these are the main legal structures available in Canada for foreign companies.

Provincial Corporation (e.g. Ontario Business Corporations Act)

Setup time

1–3d

Est. cost

$1,000

Min. capital

None

Corp. tax

26.5%

Div. WHT

25%

VAT rate

—

Registered address required100% foreign ownership permitted

Annual obligations

  • T2 corporate tax return
  • Annual return (provincial registry)
  • GST/HST returns
  • T4 payroll summaries

Overview

Provincial incorporation (e.g. Ontario OBCA) is simpler and cheaper but limits right to operate in other provinces without extra-provincial registration. No Canadian residency requirement for directors in some provinces (BC, Ontario, Alberta have abolished the requirement). No minimum capital. Commonly used by small to medium businesses focused on one province.

Official company registry

Federal Corporation (Canada Business Corporations Act)

Setup time

1–5d

Est. cost

$1,500

Min. capital

None

Corp. tax

26.5%

Div. WHT

25%

VAT rate

—

Local director requiredRegistered address required

Annual obligations

  • T2 corporate tax return (CRA)
  • Annual return (Corporations Canada)
  • GST/HST returns
  • T4 payroll summaries
  • Provincial tax returns

Overview

Federal incorporation gives right to operate across all provinces. At least 25% of directors must be Canadian residents (or at least 1 if fewer than 4 directors). No minimum capital. GST/HST registration required if revenue exceeds CAD 30,000. Federal corporate tax: 15% (9% for small business on first CAD 500,000). Provincial corporate tax varies: 8-16%. Combined federal+provincial rate approximately 26.5%.

Official company registry

Compliance Risks

Key EOR compliance risks in Canada.

Discuss each of these with your chosen provider before signing.

Provincial employment standards variation

High

Each province has its own Employment Standards Act with different minimums for notice, severance, vacation, and overtime. Ontario, Quebec, and BC have materially different rules.

Quebec specifics

High

Quebec operates under a distinct civil law system with additional requirements including Bill 96 (French language requirements for employment contracts).

CPP and EI contributions

Medium

Canada Pension Plan (CPP) and Employment Insurance (EI) are mandatory contributions. Employer CPP rate is 5.95% (2025). EI employer rate is 1.4× the employee rate.

WSIB / workers compensation

Medium

Workers compensation is provincially administered and mandatory. Rates vary by industry and province. Your EOR must register in each province where employees work.

Cost Estimator

Estimate your Canada EOR cost.

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Need full payroll data for Canada?

Income tax brackets, social security rates, employment law, and payroll calculator.

Canada country page Payroll Calculator All EOR guides